Looking ForwardLooking Forward

Geoff HustonGeoff Huston

APNIC 20APNIC 20

There are many ways of predicting There are many ways of predicting the future….the future….

The tough bit is getting it right!The tough bit is getting it right!

““One day man will travel faster than a horse One day man will travel faster than a horse can run”can run”

Rene DescarteRene Descarte

This approachThis approach

is an informal look at some aspects of the is an informal look at some aspects of the ISP industry today that might help us in ISP industry today that might help us in looking forward across the next few yearslooking forward across the next few years

Boom and BustBoom and Bust

Is nothing new…Is nothing new…

1637 – tulip mania takes hold in Holland and the price 1637 – tulip mania takes hold in Holland and the price of tulip bulbs escalates to fantastic levels. The of tulip bulbs escalates to fantastic levels. The subsequent recovery from the crash took decades to subsequent recovery from the crash took decades to overcome and restore Dutch fortunes.overcome and restore Dutch fortunes.

1719 Banque Royale – John Law introduces the French 1719 Banque Royale – John Law introduces the French king to the magical mysteries of bank credit and paper king to the magical mysteries of bank credit and paper money. At this point the word “millionaire” entered our money. At this point the word “millionaire” entered our vocabulary. But by 1720 the Parisian crowd were less vocabulary. But by 1720 the Parisian crowd were less than impressed with Law’s sharp dealings as the than impressed with Law’s sharp dealings as the French economy collapsed utterly and France was French economy collapsed utterly and France was brought to the brink of revolution.brought to the brink of revolution.

It’s a post-dot-boom-and-bust worldIt’s a post-dot-boom-and-bust worldThe Internet boom has been pretty mild by The Internet boom has been pretty mild by comparison with past booms in gold, oil, rail, comparison with past booms in gold, oil, rail, shipping, ice and, of course, tulips.shipping, ice and, of course, tulips.

The peak of the Internet boom saw stock indices peak at The peak of the Internet boom saw stock indices peak at just 3 times their longer-term valuejust 3 times their longer-term value

It’s a post-dot-boom-and-bust worldIt’s a post-dot-boom-and-bust world

But the lessons from the boom cycle are no But the lessons from the boom cycle are no different…different…

Innovation

Enthusiasm

Mania

Elation

Intensity

Time

Disillusion

Cynicism

Panic

Depression

OverreactionOverreactionRealityReality

2005

TodayTodayISPs no longer operate a rapid expansion-based ISPs no longer operate a rapid expansion-based business modelbusiness model

Internet service business models are tending to use a common Internet service business models are tending to use a common theme of theme of service consolidationservice consolidation

Industry attention at the ISP level is now concentrating Industry attention at the ISP level is now concentrating on product marketing aspects of the Internet service on product marketing aspects of the Internet service model:model:

Dependability and integrityDependability and integrity Utility and flexibilityUtility and flexibility Value-add service modelsValue-add service models Quality and performanceQuality and performance

Applications and Services that meet business case Applications and Services that meet business case criteriacriteria

From Optimism to From Optimism to ConservatismConservatism

We’ve learned that optimism alone is no substitute for We’ve learned that optimism alone is no substitute for knowledge and capability within the industryknowledge and capability within the industry

A conservative period of consolidation rather than explosive A conservative period of consolidation rather than explosive growthgrowth

Investment programs need to show assured and competitively Investment programs need to show assured and competitively attractive financial returns across the life cycle of the programattractive financial returns across the life cycle of the program

Reduced investment risk implies reduced levels of innovation and Reduced investment risk implies reduced levels of innovation and experimentation in service modelsexperimentation in service models

Attempts to combine communications with additional services to Attempts to combine communications with additional services to create value-added service bundlescreate value-added service bundles

Accompanied by greater emphasis on service robustness and Accompanied by greater emphasis on service robustness and reliabilityreliability

Security QuestionsSecurity QuestionsIt’s a very hostile world out there among the packetsIt’s a very hostile world out there among the packets

We’ve learned that we need to understand more about what We’ve learned that we need to understand more about what stakeholders want from the Internet in terms of securitystakeholders want from the Internet in terms of security

The list of outstanding issues include:The list of outstanding issues include: How can users identify each other?How can users identify each other? How can users identify network-based services and validate the How can users identify network-based services and validate the

integrity of such services before entrusting them with data?integrity of such services before entrusting them with data? How can the network protect itself from abuse and attack?How can the network protect itself from abuse and attack? How can users protect themselves from abuse and attack?How can users protect themselves from abuse and attack? What are a user’s obligations and responsibilities?What are a user’s obligations and responsibilities? How can abusers be identified? And whose role is it?How can abusers be identified? And whose role is it? What is the role of the ISP?What is the role of the ISP?

Neutral common carrier? Neutral common carrier? Trusted intermediary?Trusted intermediary?Enforcement point?Enforcement point?

Security FocusSecurity Focus

We’ve learned that we cannot operate global networks We’ve learned that we cannot operate global networks based on random trust modelsbased on random trust models

A highly visible security focus for the next few yearsA highly visible security focus for the next few yearsIncreased end-user awareness of vulnerabilities and weaknesses Increased end-user awareness of vulnerabilities and weaknesses and a desire for more secure and trustable services and a desire for more secure and trustable services Increased public sector agency awareness of the vulnerabilities Increased public sector agency awareness of the vulnerabilities of the Internet communications environment and its of the Internet communications environment and its consequencesconsequencesA response based on increased technology effort in dismantling A response based on increased technology effort in dismantling aspects of the Internet’s distributed trust model and attempting to aspects of the Internet’s distributed trust model and attempting to replace it with negotiated conditional trustreplace it with negotiated conditional trust

There is now a considerable industry based on insecurityThere is now a considerable industry based on insecurity But little actual work based on robust securityBut little actual work based on robust security

Multiple NetworksMultiple NetworksWe’ve learned that IP is not the panacea of communications protocols and that We’ve learned that IP is not the panacea of communications protocols and that “convergence” remains a deluded fantasy“convergence” remains a deluded fantasy

Recognise TCP/IP’s strengths and weaknessesRecognise TCP/IP’s strengths and weaknesses TCP/IP allows adaptable traffic sessions to operate extremely efficiently over wired TCP/IP allows adaptable traffic sessions to operate extremely efficiently over wired

networksnetworks TCP/IP is probably not the optimal approach to support:TCP/IP is probably not the optimal approach to support:

mobile wireless trafficmobile wireless traffic

resource management requirementsresource management requirements TCP/IP is not strong in supporting:TCP/IP is not strong in supporting:

real time traffic under localized congestion eventsreal time traffic under localized congestion events

various forms of traffic engineering applicationsvarious forms of traffic engineering applications

(Unless you are willing and able to overprovision everywhere!)(Unless you are willing and able to overprovision everywhere!)

““Everything over IP” is still not a viable carrier strategy - continued use of multiple Everything over IP” is still not a viable carrier strategy - continued use of multiple networks to provide specialized service environments for various communications networks to provide specialized service environments for various communications application sectors is likely for some time yetapplication sectors is likely for some time yet

Bandwidth Abundance LessonsBandwidth Abundance Lessons

Dense Wave Division Multiplexing is lifted per-strand optical Dense Wave Division Multiplexing is lifted per-strand optical capacity over a thousand-foldcapacity over a thousand-fold

from 2.5Gbps to 6.4Tbps (640 wavelengths, each of 10Gbps per lambda) from 2.5Gbps to 6.4Tbps (640 wavelengths, each of 10Gbps per lambda) per optical strandper optical strand

The major long haul communications routes worldwide are more The major long haul communications routes worldwide are more than amply provisioned with IP bandwidththan amply provisioned with IP bandwidth

The shift from demand-pull to massive supply-overhang has destroyed the The shift from demand-pull to massive supply-overhang has destroyed the business stability of the long haul communications supply market.business stability of the long haul communications supply market.

We’ve learned that when you eliminate one choke point in a We’ve learned that when you eliminate one choke point in a system you expose otherssystem you expose others

Doh!Doh!

The network ‘choke’ points are shifting to the access domain, The network ‘choke’ points are shifting to the access domain, not the long haul elementsnot the long haul elements

Continued pressure for high speed last mile servicesContinued pressure for high speed last mile services

Broadband Last MileBroadband Last Mile

What form of Broadband Access?What form of Broadband Access? Wireless is probably not a logical contender for ubiquitous Wireless is probably not a logical contender for ubiquitous

last mile, but it has its areas of application - if you are last mile, but it has its areas of application - if you are sufficiently desperate!sufficiently desperate!

Hybrid Fibre Coax systems are capital intensive and often Hybrid Fibre Coax systems are capital intensive and often rely on a strong pay-TV market to provide some capital rely on a strong pay-TV market to provide some capital leverage – no longer relevant for many markets!leverage – no longer relevant for many markets!

Fibre is great – but its also capital intensive – good for CBD Fibre is great – but its also capital intensive – good for CBD and dense MTA deployments but less capital efficient for low and dense MTA deployments but less capital efficient for low density deployments – too expensive!density deployments – too expensive!

DSL is a reasonable compromise for lower density DSL is a reasonable compromise for lower density deployment environments over existing copper plantdeployment environments over existing copper plant

BitTorrent and similar P-2-P is pushing demand for higher BitTorrent and similar P-2-P is pushing demand for higher speed symmetrical DSL servicesspeed symmetrical DSL services

Technology – IPv4Technology – IPv4

We’re learning that we might be stuck with making IPv4 work for We’re learning that we might be stuck with making IPv4 work for longer than we thought we could or shouldlonger than we thought we could or should

IPv4 remains the overwhelmingly dominant protocol choice for IPv4 remains the overwhelmingly dominant protocol choice for the service industrythe service industry

Its now a NAT world - but NAT has its problemsIts now a NAT world - but NAT has its problemsPeer-to-peer networksPeer-to-peer networks

Service fragilityService fragility

VOIPVOIP

Complexity and CostComplexity and Cost

Even with NATS we are running through the IPv4address pool – IP Even with NATS we are running through the IPv4address pool – IP service networks will need to commence some considered investment service networks will need to commence some considered investment

in IPv6 sooner rather than laterin IPv6 sooner rather than later

Technology – IPv6Technology – IPv6““IP with larger addresses”IP with larger addresses”Address space requirements are no longer being easily met Address space requirements are no longer being easily met by IPv4by IPv4This is an issue for high volume deployments including:This is an issue for high volume deployments including:

GPRS mobileGPRS mobile Pocket IP devicesPocket IP devices Consumer devicesConsumer devices

IPv6 appears to offer reasonable technology solutions that IPv6 appears to offer reasonable technology solutions that preserve IP integrity, reduce middleware dependencies and preserve IP integrity, reduce middleware dependencies and allow full end-to-end IP functionality for a device-rich worldallow full end-to-end IP functionality for a device-rich world

BUT - Noone wants to pay for widespread IPv6 BUT - Noone wants to pay for widespread IPv6 deployment just yet!deployment just yet!

IPv6 - From iPOD to iPOTIPv6 - From iPOD to iPOT

IPv4 cannot sustain a IPv4 cannot sustain a device-dense worlddevice-dense world

If we are seriously looking If we are seriously looking towards a world of billions towards a world of billions of chattering devices then of chattering devices then we need to look at an we need to look at an evolved communications evolved communications service industry that service industry that understands the full understands the full implications of the words implications of the words “commodity” and “utility”“commodity” and “utility”

Voice over IPVoice over IPWe’re learning that voice has more dimensions than just We’re learning that voice has more dimensions than just emulating simple carriage of a voice signalemulating simple carriage of a voice signal

The technology is getting better…The technology is getting better… Load-sensitive codecs that adjust their signal rate to the current delay / Load-sensitive codecs that adjust their signal rate to the current delay /

loss characteristicsloss characteristics Abundant trunk bandwidth circumvents the need for detailed QoS in the Abundant trunk bandwidth circumvents the need for detailed QoS in the

network corenetwork core Solutions available to map between the telephone address domain and Solutions available to map between the telephone address domain and

the Internet address domain (ENUM)the Internet address domain (ENUM) Intertwining hand-held devices into phone + PDAIntertwining hand-held devices into phone + PDA

But its more than Skype - there are many practical technology, But its more than Skype - there are many practical technology, regulatory and business issues remain on the VOIP path….regulatory and business issues remain on the VOIP path….

Services and MiddlewareServices and Middleware

Can you completely separate various service platforms from Can you completely separate various service platforms from the network?the network?

Middleware technologies continue to spread with the addition of Middleware technologies continue to spread with the addition of a more generic approach to include aspects of:a more generic approach to include aspects of:

Interception technologiesInterception technologiesActive security-based response systemsActive security-based response systemsOpen pluggable edge service technologiesOpen pluggable edge service technologies

Directory technologies and mapping of disparate protocol and Directory technologies and mapping of disparate protocol and services domains into the IP worldservices domains into the IP world

But its not the only push - the alternative is packaging the But its not the only push - the alternative is packaging the entire service delivery model into XML – which also has its entire service delivery model into XML – which also has its own unstoppable momentumown unstoppable momentum

Today’s Carrier Squeeze PlayToday’s Carrier Squeeze Play

ServiceService

ApplicationApplication

PlatformPlatform

NetworkNetwork

UserUser

InfrastructureInfrastructure

ServiceService

ApplicationApplication

PlatformPlatform

NetworkNetwork

UserUser

The Traditional ModelThe Emerging Model

The ISP and The CarrierThe ISP and The Carrier

The Carrier ISP business is being pushed The Carrier ISP business is being pushed into the role of:into the role of: Commodity IP transit providerCommodity IP transit provider Consumer market IP accessConsumer market IP access SME IP accessSME IP access

The enterprise ISP market is being pushed The enterprise ISP market is being pushed into the role of:into the role of: SME service integratorSME service integrator

Optimism vs RealityOptimism vs Reality

Convergence to IP as a multi-media Convergence to IP as a multi-media broadcast medium are not well groundedbroadcast medium are not well grounded

Triple Play Time is over – BitTorrent winsTriple Play Time is over – BitTorrent wins

Optimism vs RealityOptimism vs Reality

Value Added Service Networks are Value Added Service Networks are causing value address service network causing value address service network providers to overstress their business providers to overstress their business modelmodel

Leave overlays to the edgeLeave overlays to the edge

Optimism vs RealityOptimism vs Reality

The Internet’s major point of leverage was The Internet’s major point of leverage was ultimately cheaper services, not better ultimately cheaper services, not better qualityquality

QoS in the core has lostQoS in the core has lost

Optimism vs RealityOptimism vs Reality

The Internet is a lousy time switchThe Internet is a lousy time switch

High quality real time data needs high High quality real time data needs high quality real time switching quality real time switching

Optimism vs RealityOptimism vs Reality

VoIP is a regulatory messVoIP is a regulatory mess

and its going to get a lot messier yet!and its going to get a lot messier yet!

Optimism vs RealityOptimism vs Reality

Carrier platform convergence with the Carrier platform convergence with the mantra of ‘everything in ATM IP” is still a mantra of ‘everything in ATM IP” is still a mythmyth

Get over it!Get over it!

Optimism vs RealityOptimism vs Reality

IP is the not the foundation of high value IP is the not the foundation of high value add networksadd networks

From value to volume - IP Transit is From value to volume - IP Transit is heading into a volume-based low-value heading into a volume-based low-value commodity activitycommodity activity

Optimism vs RealityOptimism vs Reality

Stop looking for another “killer app” – now Stop looking for another “killer app” – now ‘everything over http’ appears to have won ‘everything over http’ appears to have won the users’ play space!the users’ play space!

Think XML, RSS, Wikis, Blogs, Torrents, Think XML, RSS, Wikis, Blogs, Torrents, Podcasts,…Podcasts,…

Some guiding principles for the IP Some guiding principles for the IP utility industryutility industry

Stick to the basics - keep the network Stick to the basics - keep the network offering simple, stable, fast and cheapoffering simple, stable, fast and cheap

Avoid feature-stuffing the network – leave Avoid feature-stuffing the network – leave that to the edgethat to the edge

Avoid integrated middlewareAvoid integrated middleware Use modular plug-ins rather than basing the Use modular plug-ins rather than basing the

network design on middlewarenetwork design on middleware Use modular service architecturesUse modular service architectures

What have we learned?What have we learned?

That the Internet is not infinitely elastic and some That the Internet is not infinitely elastic and some things just cannot fly no matter how much thrust is things just cannot fly no matter how much thrust is put under itput under it

Vertical service providers are fading away- building Vertical service providers are fading away- building communications infrastructure is one thing, using it communications infrastructure is one thing, using it to best effect is another - both aspects require care to best effect is another - both aspects require care and attention from dedicated playersand attention from dedicated players

That the Internet may not be the best entertainment That the Internet may not be the best entertainment medium today – but it’s a remarkable exchange medium today – but it’s a remarkable exchange medium. And the emerging entertainment models medium. And the emerging entertainment models appear to be a peer-to-peer edge-to-edge overlayappear to be a peer-to-peer edge-to-edge overlay

That this is an immature technology-intensive That this is an immature technology-intensive activity with much that we still have to learnactivity with much that we still have to learn

So what can we expect?So what can we expect?

My personal list of expectations for the next few My personal list of expectations for the next few years:years:

No repeat of boom and bustNo repeat of boom and bust

Networks are a commodity utility business with commodity returns Networks are a commodity utility business with commodity returns (the shift from value to volume) – this is plumbing(the shift from value to volume) – this is plumbing

More surprises from Google et al in terms of compelling user More surprises from Google et al in terms of compelling user service modelsservice models

The regulatory pendulum is swinging back - renewed levels of The regulatory pendulum is swinging back - renewed levels of regulatory interest to ensure that public objectives are being regulatory interest to ensure that public objectives are being achievedachieved

More restructuring - industry sector members with longer term More restructuring - industry sector members with longer term objectives phrased more modestly than may have been the case in objectives phrased more modestly than may have been the case in the past five yearsthe past five years

Meet the new economy. Meet the new economy.

Same as the old economySame as the old economy..